the evolution of management theory mr. prasun kumar 1
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Importance of Management Principles Importance Direction for Training of Managers Encourages Managers to Develop Objective Approach Guide to Research in Management Explains and predicts the Behaviour Prescribes and Evaluates the Behaviour Useful for spreading Knowledge Improves understanding 3TRANSCRIPT
The Evolution of Management Theory
Mr. Prasun Kumar1
Principles of Management
Management principles are statements of fundamental truth which provides guidelines for managerial decision-making and action.
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Importance ofManagement Principles
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Modern Modern ApproachApproach
Neo Classical Neo Classical ApproachApproach
Classical Classical ApproachApproach
Adm Mgt Adm Mgt By Henry Fayol By Henry Fayol
14 Principles14 Principles
ScientificScientific Mgt Mgt
By FW TaylorBy FW Taylor
Bureaucratic MgtBureaucratic Mgt
EVOLUTION OF MANAGEMENT EVOLUTION OF MANAGEMENT THOUGHTSTHOUGHTS
Behavioural Behavioural ScienceScience
Human RelationHuman Relation
System System ApproachApproach
QuantitativeQuantitativeApproachApproach
Contingency Contingency ApproachApproach
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Evolution of Management Theory
1890 1940 2000
Administrative Management
Behavioral Management
Scientific Management
Management Science
Org. Environment5
Management theory
Modern management began in the late 19th century.Organizations were seeking ways to
better satisfy customer needs.Machinery was changing the way goods
were produced.Managers had to increase the efficiency of
the worker-task mix.
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Scientific Management Theory
Defined by Frederick Taylor, late 1800’s.
The systematic study of the relationships between people and tasks to redesign the work for higher efficiency.Taylor sought to reduce the time a
worker spent on each task by optimizing the way the task was done.
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Principles of Scientific Management8
The 4- Principles
Four Principles to increase efficiency:1. Study the way the job is performed
now & determine new ways to do it. Gather detailed, time and motion information. Try different methods to see which is best.
2. Codify the new method into rules. Teach to all workers.
3. Select workers whose skills match the rules set in Step 2.
4. Establish a fair level of performance and pay for higher performance. Workers should benefit from higher output.
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Problems of Scientific Management
Managers often implemented only the increased output side of Taylor’s plan.They did not allow workers to share in
increased output.Specialized jobs became very boring, dull.Workers ended up distrusting Scientific
Management.Workers could purposely “under-
perform”Management responded with
increased use of machines.
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The Gilbreths
Frank and Lillian Gilbreth refined Taylor’s methods.Made many improvements to time and
motion studies.Time and motion studies:
1. Break down each action into components.2. Find better ways to perform it.3. Reorganize each action to be more
efficient.Gilbreths also studied fatigue problems,
lighting, heating and other worker issues.
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Administrative Management
Seeks to create an organization that leads to both efficiency and effectiveness.
Max Weber developed the concept of bureaucracy.A formal system of organization and
administration to ensure effectiveness and efficiency.
Weber developed the Five principles shown in Figure 2.2.
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Bureaucratic Principles
A BureaucracyA Bureaucracyshould haveshould have
Written rulesWritten rules
System of taskSystem of taskrelationshipsrelationships
Hierarchy ofHierarchy ofauthorityauthority
Fair evaluationFair evaluation and rewardand reward
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Key points of Bureaucracy
Authority is the power to hold people accountable for their actions.
Positions in the firm should be held based on performance not social contacts.
Position duties are clearly identified. People should know what is expected of them.
Lines of authority should be clearly identified. Workers know who reports to whom.
Rules, Standard Operating Procedures (SOPs), & Norms used to determine how the firm operates. Sometimes, these lead to “red-tape” and
other problems.
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Fayol’s PrinciplesHenri Fayol, developed a set of 14 principles:
1. Division of Labor: allows for job specialization. Fayol noted firms can have too much specialization
leading to poor quality and worker involvement.2. Authority and Responsibility: Fayol included both
formal and informal authority resulting from special expertise.
3. Unity of Command: Employees should have only one boss.
4. Line of Authority: a clear chain from top to bottom of the firm.
5. Centralization: the degree to which authority rests at the very top.
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Fayol’s Principles (Cont…)
6. Unity of Direction: One plan of action to guide the organization.
7. Equity: Treat all employees fairly in justice and respect.
8. Order: Each employee is put where they have the most value.
9. Initiative: Encourage innovation.10. Discipline: obedient, applied, respectful
employees needed.
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Fayol’s Principles (Cont…)
11. Remuneration of Personnel: The payment system contributes to success.
12. Stability of Tenure: Long-term employment is important.
13. General interest over individual interest: The organization takes precedence over the individual.
14. Esprit de corps: Share enthusiasm or devotion to the organization.
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Behavioral Management
Focuses on the way a manager should personally manage to motivate employees.
Mary Parker Follett: an influential leader in early managerial theory.Suggested workers help in analyzing their
jobs for improvements.The worker knows the best way to
improve the job. If workers have the knowledge of the
task, then they should control the task.
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The Hawthorne Studies
Study of worker efficiency at the Hawthorne Works of the Western Electric Co. during 1924-1932.Worker’s productivity was measured at
various levels of light illumination.Researchers found that regardless of
whether the light levels were raised or lowered, productivity rose.
Actually, it appears that the workers enjoyed the attention they received as part of the study and were more productive.
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Theory X and Y
Douglas McGregor proposed the two different sets of worker assumptions. Theory X: Assumes the average worker is lazy,
dislikes work and will do as little as possible. Managers must closely supervise and control
through reward and punishment. Theory Y: Assumes workers are not lazy, want
to do a good job and the job itself will determine if the worker likes the work. Managers should allow the worker great
latitude, and create an organization to stimulate the worker.
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Theory X vs. Theory Y
Theory YTheory YEmployee is not Employee is not lazylazy
Must create work Must create work setting to build setting to build initiativeinitiative
Provide authority Provide authority to workersto workers
TheoryTheory X X
Employee is lazyEmployee is lazy
Managers mustManagers must closely superviseclosely supervise
Create strict rules Create strict rules & defined & defined rewardsrewards
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Theory Z
William Ouchi researched the cultural differences between Japan and USA. USA culture emphasizes the individual, and
managers tend to feel workers follow the Theory X model.
Japan culture expects worker committed to the organization first and thus behave differently than USA workers.
Theory Z combines parts of both the USA and Japan structure. Managers stress long-term employment, work-
group, and organizational focus.
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Management Science
Uses rigorous quantitative techniques to maximize resources.Quantitative management: utilizes linear
programming, modeling, simulation systems.Operations management: techniques to
analyze all aspects of the production system.Total Quality Management (TQM): focuses
on improved quality.Management Information Systems (MIS):
provides information about the organization.
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Organization-Environment Theory
Considers relationships inside and outside the organization.The environment consists of forces,
conditions, and influences outside the organization.
Systems theory considers the impact of stages:Input: acquire external resources.Conversion: inputs are processed into goods
and services.Output: finished goods are released into the
environment.
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Systems Considerations
An open system interacts with the environment. A closed system is self-contained.Closed systems often undergo entropy
and lose the ability to control itself, and fails.
Synergy: performance gains of the whole surpass the components.Synergy is only possible in a coordinated
system.
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The Organization as an Open System
InputInput StageStage
RawRawMaterialsMaterials
ConversionConversionStageStage
MachinesMachinesHuman skillsHuman skills
OutputOutputStageStage
GoodsGoodsServicesServices
Sales of outputsSales of outputsFirm can then buy inputsFirm can then buy inputs
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Contingency Theory
Assumes there is no one best way to manage.The environment impacts the organization
and managers must be flexible to react to environmental changes.
The way the organization is designed, control systems selected, depend on the environment.
Technological environments change rapidly, so must managers.
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Structures
Mechanistic: Authority is centralized at the top. (Theory X)Employees closely monitored and
managed.Very efficient in a stable environment.
Organic: Authority is decentralized throughout employees. (Theory Y)Much looser control than mechanistic.Managers can react quickly to changing
environment.
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